Thursday, November 20, 2003

The curse

 The curse

Lately, articles that analyze the supposed curse that weighs on countries rich in oil resources have been published like rice. At first glance it would seem that there is a certain basis of support for these theories of obscurantism, however, for proper reading, it is important to clarify one or another detail.

First of all, and judging by the immense number of existing offers to free ourselves from this cursed burden, it is obvious that we are not talking about a common curse. There are even those who generously offer to assume their risks, even paying us for the right to such sacrifice.

A suggested exorcism is to leave OPEC to sell oil at its marginal extraction cost, thus guaranteeing that we avoid earning the dirty rent for oil. Another way is to privatize it, against a tasty and tempting initial payment, to cancel the current public debt... and get into debt again? As you can see, both methods have a strange similarity with selling the sofa.

Finally, considering that the European treasury earns about 100 dollars net per barrel, while those who sacrifice the resource only get 25 dollars, gross, it is not very obvious who is the cursed one.

The indisputable thing is that oil revenues have not been used well, but as you can understand, this has less to do with the abundance of resources and more to do with the damn system used to distribute them. Currently, the entire oil revenue enters the government's coffers alone and effortlessly, thus unbalancing the democratic system, since we all know that the happy holder of a full oil checkbook has little incentive to pay attention to the citizen.

How do we get out of this? To begin with and due to the obvious and incurable lack of talents of our rulers, we must apply the parable of the talents in reverse and bypass them, delegating a greater part of the administration of oil revenues directly to the citizens.

However, since we civil society members are not very different from our politicians, like-minded, like-minded, perhaps we should, just in case, pay the oil dividends with educational tickets.

Chances of it? Few, due to that true curse, the one that leads our leaders to believe that everything bad in the past is miraculously cured with their arrival in power (with the checkbook) and, us, to believe them.

Translated by Google

On Transparency and Curses

Lately there has been a lot of talk about a curse that, through corruption and other distortions, is stopping oil-rich countries from turning income into development. The Extractive Industries Transparency Initiative, championed by the UK and endorsed by the World Bank, has been named exorcist and is starting its rites by applying a much welcomed transparency to projects such as the Chad-Cameroon pipeline.

In the name of that same transparency, let us also remember that for every single dollar received gross by any oil producing country (who forever sacrifices a non-renewable asset), the public treasury of many oil consuming countries receives, net, at least four dollars, and is therefore a likely victim of the same curse, albeit stricken by different symptoms. For instance, in the oil-consuming developed countries, the curse has now created such an addiction to gasoline taxes, that their whole fiscal structures would be completely unsustainable without them.

To exorcise the taxman’s curse transparency would also be a good starting point as most of the consumers in these countries are not remotely aware of the real extent of the gasoline taxes, and even less of how the proceeds are used. For instance, having always been told that these taxes were environmental, they would be surprised to learn that probably less than half a percent of the US$100 billion collected yearly in Europe, just in taxes on lead-free gasoline, goes to the environment and, worse, that much of it goes in subsidies to the even less environmentally-friendly coal.

Also, today, as the possibilities of satisfying the world’s demands of energy seem quite uncertain and the world is becoming more aware of the final cost of cutting or not the trees of the Amazon will be paid by all, whether they like it or not, it is clear that the world needs to become much more penny-wise when developing alternative energies… and we all know that the penny-wisest best and sole companion, is transparency.

So, after the pipelines, when do we start with the Exchequer’s bag?